Pakistan has successfully secured $1.3 billion in climate financing from the International Monetary Fund (IMF), marking a significant step towards strengthening its economic resilience.
During a press briefing, IMF Director of Communications Julie Kozack confirmed that discussions with Pakistan encompassed both the Extended Fund Facility (EFF) and the newly secured climate financing package, as reported by Express News.
IMF Climate Funding and Economic Support
Kozack emphasized that Pakistan’s 37-month EFF program, originally approved in September last year, remains operational.
Earlier this week, Prime Minister Shehbaz Sharif announced the agreement, stating that $1.3 billion would be provided under the IMF’s climate resilience loan program, which will be implemented over 28 months, pending formal approval by the IMF board.
Additionally, a staff-level agreement will facilitate the release of $1 billion under the $7 billion bailout program initiated last year.
Breakdown of the New IMF Support
Nathan Porter, IMF Mission Chief to Pakistan, outlined the details of the agreement in a press release, explaining that:
- The staff-level agreement covers the first review of the 37-month EFF as well as the newly introduced 28-month resilience and sustainability program.
- The total financial assistance under the new climate financing framework amounts to $1.3 billion over the next 28 months.
- Once the IMF board approves the agreement, Pakistan will receive an immediate disbursement of $1 billion under the EFF, increasing the total amount received under this facility to $2 billion.
Macroeconomic Stability and Future Prospects
Porter commended Pakistan’s efforts, highlighting that despite facing global economic challenges, the country has made notable progress in stabilizing its economy and restoring investor confidence.
FAQs
- What is the purpose of the $1.3 billion IMF climate financing?
- This funding aims to support climate resilience projects and strengthen Pakistan’s economic stability over 28 months.
- Is this funding separate from Pakistan’s existing IMF loan?
- Yes, this is in addition to the $7 billion bailout program, with $1 billion also being disbursed under the EFF.
- When will Pakistan receive the funds?
- The disbursement is subject to IMF board approval, after which funds will be released gradually.
- How will this funding benefit Pakistan’s economy?
- It will help enhance climate resilience, promote sustainable development, and contribute to macroeconomic stability.
- What progress has Pakistan made under the IMF program?
- Pakistan has steadily improved its economic stability and investor confidence despite facing challenging global conditions.
